Wednesday, June 17, 2020

Spotify talks Apple complaint as Hey email app sparks row | Music Ally

We reported yesterday on the news that the European Commission is launching two formal investigations of Apple, including one sparked by anticompetition complaints from Spotify and an e-books / audiobooks firm (not Amazon, but Rakuten subsidiary Kobo). Yesterday afternoon, Spotify held a Zoom call with journalists to offer its views on the news.

You can read our notes from the call here. Spotify’s head of global affairs and chief legal officer Horacio Gutierrez – who’s experienced antitrust investigations from the other side in his days at Microsoft when it was doing battle with the EC – slung some zingers in Apple’s direction, saying that the company “acts as stadium owner, referee and player, and tilts the playing field in favour of its own services”.

Gutierrez made some comments about the impact of the investigation rules against Apple that seemed like an effort to swing the music industry behind Spotify’s position. “It would accelerate our ability to grow premium users, which would in turn result in better monetisation of the Spotify app, which in turn would also result in better monetisation for music rightsholders which receive the lion’s share of the money that we generate,” he said.

(We suspect Apple may clap right back at that, as it did last year, with an ‘if Spotify wants to pay more to rightsholders…’ reference to the latter company’s appeal against new songwriter royalty rates in the US though.)

Gutierrez also confirmed that Spotify has not filed an anticompetition complaint against Apple in the US, making it clear that the company feels it has a better chance of prevailing in Europe. “At the moment we’re really focusing on this case in Europe. We believe that is where the thinking and the ability to address these technology issues is more likely to result in a positive outcome.” However, Spotify has been providing information, when asked, to federal and state agencies in the US who are considering their own probes into Apple.

The formal investigation could take a year and a half or more to reach a verdict. If you’re interested in it, though, keep a close eye on another rumpus that blew up overnight in the US, also around Apple’s App Store. Project-management software firm Basecamp recently launched an email app called ‘Hey’, which costs $99 for an annual subscription. Initially approved for the App Store, subsequent updates have been rejected by Apple because that subscription wasn’t using the company’s in-app purchases system.

Basecamp’s CTO’s run of angry tweets on the situation makes for punchy reading (complete with mafia comparisons) while tech site Protocol has a longer explanation of what’s happened and why, and Apple-focused blog Daring Fireball has some analysis of the merits of Apple’s arguments.

We don’t mention this case as proof that Spotify is right and Apple is anticompetitive: that’s for the European Commission and other regulators to rule on. However, it does show that these kind of disputes are still happening outside music: questions about app store revenue shares and apps that compete with the store owner’s own services go beyond Spotify.

And (again, without prejudging the ultimate conclusions) every dispute that explodes into the press is another potential nudge for regulators to follow the EC in launching their own formal probes – investigations that, as Gutierrez made clear yesterday, Spotify will be happy to provide information to.

Stuart Dredge


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